Now may be a good time to buy but money is tight and banks are becoming more cautious about lending
Good property deals may be easier to secure in coming months as prices are set to plummet further. But buyers may find mortgages increasingly difficult to secure as banks across the board are cautious about lending.
'Getting a mortgage is becoming harder and that is keeping end users away as banks are now much more cautious about lending money,' said Marcos Chan, Jones Lang LaSalle head of research for Hong Kong. 'Every bank is cautious about property valuation and every cent they spend.
The issue at stake is not so much mortgage rates but the reduced loan-to-value ratios and conservative valuations.
Colliers International executive director for residential sales Ricky Poon said: 'All the banks have tightened their lending. Where they would once have lent 70 per cent [for a mortgage], banks are now lending just 50 to 60 per cent. They are really playing it safe and are bracing for lower property prices.'
According to Irene Chow, senior vice-president and Greater China equity strategist at Credit Suisse Private Banking division, since the end of June, the Centa-City Leading Index, which tracks the movement of residential property prices in Hong Kong and is set by Centaline Property Agency, has fallen by about 10 per cent.
'In the year to date, the index is down to minus 1 per cent which means this year's entire gains have been wiped out,' she said.
